When members of the accounting and return-preparer professions find themselves or their firm in trouble, they turn to Anderson & Jahde for help. Our dual licensed attorney-CPA's have practiced in the accounting profession and understand it. Anderson & Jahde defends accountant malpractice claims, Board of Accountancy complaints, IRS Office of Professional Responsibility complaints and AICPA complaints; and consults in the sale of accounting practices, disputes surrounding firm breakups and other firm business matters.
RECENT DEVELOPMENTS
U.S. Supreme Court
On January 17, 2012, attorneys from Anderson & Jahde were honored to attend oral arguments in the U.S. Supreme Court in Home Concrete v. Commissioner - a significant case for both IRS and taxpayers. In cases involving the same issues as Home Concrete, Anderson & Jahde obtained victories for its clients in the U.S. Tax Court, which were appealed to the D.C. Circuit and ultimately the Supreme Court to be considered together with Home Concrete. Among other issues, the IRS is asking the Supreme Court to change its prior interpretation of almost identical language in IRC § 6501 (Colony decision), and determine contrary to Colony that an overstatement of basis in property constitutes an understatement of gross income availing the IRS of the enlarged six-year statute of limitations on assessments. The taxpayer and the U.S. each had a half hour to present their arguments. The U.S. argued that the plain language of the Internal Revenue Code favors utilizing the six-year period, the Court’s prior opinion in Colony should not apply, and that a Treasury regulation, promulgated while Home Concrete and other cases were pending, should be allowed to retroactively clarify an ambiguity in the statute. The taxpayer argued that the Supreme Court’s prior holding in Colony controls, and, as such, the IRS’s “clarification” as set forth in the promulgated regulation is an attempt to overturn established law. Whatever the Court decides, it will have significant future impact for many taxpayers, especially those reporting both real and personal property transactions on their tax returns.
Offshore Voluntary Disclosure
On January 9, 2012, the IRS announced that it is indefinitely re-opening its hugely successful Offshore Voluntary Disclosure Program. Under the program, taxpayers with foreign assets (bank accounts, investment accounts, foreign corporations, foreign trusts, etc.) who have failed to disclose these assets in prior years can now come forward with a predictable outcome.
Taxpayers who come in under the program will be required to pay the full amount of additional tax (including a 20% accuracy-related penalty and interest), plus a miscellaneous penalty equal to 27.5% of the highest aggregate value of the undisclosed assets over the last 8 years. Reduced penalties of 5% and 12.5% are available under some circumstances. The IRS has made clear, however, that it can discontinue this program, or adjust the penalty provisions for some or all participants, at any time.
Since the first Offshore Voluntary Disclosure Program was announced in 2009, Anderson & Jahde’s attorneys have assisted dozens of Taxpayer’s come into compliance with their offshore disclosure obligations. While the IRS’s announcement is great news to those who did not participate in prior programs, entering the program should not be done without fully understanding the effect and potential consequences of doing so. If you have undisclosed foreign assets, don’t delay. Call Anderson & Jahde so that we can start discussing what options are best for your unique situation.